Automatic vacation of stay: Asian Resurfacing judgment resurfaced

Justice. Abhay S. Oka J for Justice Dr Dhananjaya Y. Chandrachud (CJI), Justice B. Pardiwala J, Justice. Manoj Misra

Factual background

By the order dated 1st December 2023, a Bench of three Hon’ble Judges of this Court expressed a view that a decision of this Court in the case of Asian Resurfacing of Road Agency Private Limited & Anr. v. Central Bureau of Investigation1 requires reconsideration by a larger Bench.

Directions in Asian Resurfacing

1. In Asian Resurfacing1, this Court dealt with the scope of interference by the High Court with an order of framing charge passed by the Special Judge under the provisions of the Prevention of Corruption Act, 1988 (for short, ‘the PC Act’). The issue was whether an order of framing charge was an interlocutory order. The High Court held that an order of framing charge under the PC Act was interlocutory. A Bench of two Hon’ble Judges of this Court, by the order dated 9th September 2013, referred the case to a larger Bench to consider the issue of whether the case of Mohan Lal Magan Lal Thacker v. State of Gujarat2 was correctly decided. A Bench of three Hon’ble Judges held that the order of framing charge was neither an interlocutory nor a final order. Therefore, it was held that the High Court has jurisdiction in appropriate cases to consider a challenge to an order of framing charge. Furthermore, the High Court has jurisdiction to grant a stay of the trial proceedings. Thereafter, it proceeded to consider in which cases a stay of the proceedings ought to be granted. The Bench considered the question in the context of a criminal trial, particularly under the PC Act. In paragraphs 30 and 31, the Bench observed thus:

31. Wherever stay is granted, a speaking order must be passed showing that the case was of exceptional nature and delay on account of stay will not prejudice the interest of speedy trial in a corruption case. Once stay is granted, proceedings should not be adjourned, and concluded within two-three months.” (Emphasis added)

Reason for the question of law arose

3. A Miscellaneous Application was filed in the decided case, in light of the order passed on 4th December 2019 by the Learned Additional Chief Judicial Magistrate, Pune. When the learned Magistrate was called upon to proceed with the trial on the ground of automatic vacation of stay after the expiry of a period of six months, the learned Magistrate expressed a view that when the jurisdictional High Court had passed an order of stay, a Court subordinate to the High Court cannot pass any order contrary to the order of stay. By the order dated 15th October 2020, this Court held that when the stay granted by the High Court automatically expires, unless an extension is granted for good reasons, the Trial Court, on expiry of a period of six months, must set a date for trial and go ahead with the same. Later, an attempt was made to seek clarification of the law laid down in the case of Asian Resurfacing [(2018) 16 SCC 299]. This Court, by the order dated 25th April 2022, did not apply the direction issued in Asian Resurfacing1 to the facts of the case before it. An attempt was made to apply the directions to an order of stay of the order of the learned Single Judge of the High Court passed by a Division Bench in a Letters Patent Appeal.

Questions of law to be decided

5. We are called upon to decide the following questions: –

(a) Whether this Court, in the exercise of its jurisdiction under Article 142 of the Constitution of India, can order automatic vacation of all interim orders of the High Courts of staying proceedings of Civil and Criminal cases on the expiry of a certain period?

(b) Whether this Court, in the exercise of its jurisdiction under Article 142 of the Constitution of India, can direct the High Courts to decide pending cases in which interim orders of stay of proceedings has been granted on a day-to-day basis and within a fixed period?

Analysis

12. We have no manner of doubt that the direction issued in paragraph 36 of Asian Resurfacing1 regarding automatic vacation of stay has been issued in the exercise of the jurisdiction of this Court under Article 142 of the Constitution of India. Even the direction in paragraph 37 of conducting day to-day hearing has been issued in exercise of the same jurisdiction. The effect of the direction issued in paragraph 36 is that the interim order of stay granted in favour of a litigant stands vacated without even giving him an opportunity of being heard, though there may not be any default on his part.

Object of passing interim orders

13. Before we examine the questions, we need to advert to the object of passing orders of interim relief pending the final disposal of the main case. The reason is that the object of passing interim order has not been considered while deciding Asian Resurfacing1. An order of interim relief is usually granted in the aid of the final relief sought in the case. An occasion for passing an order of stay of the proceedings normally arises when the High Court is dealing with a challenge to an interim or interlocutory order passed during the pendency of the main case before a trial or appellate Court. The High Court can grant relief of the stay of hearing of the main proceedings on being satisfied that a prima facie case is made out and that the failure to stay the proceedings before the concerned Court in all probability may render the remedy adopted infructuous. When the High Court passes an interim order of stay, though the interim order may not expressly say so, the three factors, viz; prima facie case, irreparable loss, and balance of convenience, are always in the back of the judges’ minds. Though interim orders of stay of proceedings cannot be routinely passed as a matter of course, it cannot be said that such orders can be passed only in exceptional cases. Nevertheless, the High Courts, while passing orders of stay in serious cases like the offences under the PC Act or serious offences against women and children, must be more cautious and circumspect. An occasion for passing an order of stay of proceeding arises as it is not possible for the High Court to take up the case for final hearing immediately. While entertaining a challenge to an order passed in a pending case, if the pending case is not stayed, the trial or the appellate Court may decide the pending case, rendering the remedy before the High Court ineffective. Such a situation often leads to the passing of an order of remand. In our legal system, which is facing a docket explosion, an order of remand should be made only as a last resort. The orders of remand not only result in more delays but also increase the cost of litigation. Therefore, to avoid the possibility of passing an order of remand, the grant of stay of proceedings is called for in many cases.

High Court’s power to vacate or modify interim relief

15. The High Courts are always empowered to vacate or modify an order of interim relief passed after hearing the parties on the following, amongst other grounds: –

(a)If a litigant, after getting an order of stay, deliberately prolongs the proceedings either by seeking adjournments on unwarranted grounds or by remaining absent when the main case in which interim relief is granted is called out for hearing before the High Court with the object of taking undue advantage of the order of stay;

(b)The High Court finds that the order of interim relief is granted as a result of either suppression or misrepresentation of material facts by the party in whose favour the interim order of stay has been made; and

(c) The High Court finds that there is a material change in circumstances requiring interference with the interim order passed earlier. In a given case, a long passage of time may bring about a material change in circumstances.

These grounds are not exhaustive. There can be other valid grounds for vacating an order of stay.

When an interim Order can come to an end

16. Interim order of stay can come to an end: –

(a) By disposal of the main case by the High Court, in which the interim order has been passed. The disposal can be either on merits or for default or other reasons such as the abatement of the case; or

(b) by a judicial order vacating interim relief, passed after hearing the contesting parties on the available grounds, some of which we have already referred to by way of illustration.

Elementary principles of natural justice, which are well recognised in our jurisprudence, mandate that an order of vacating interim relief or modification of the interim relief is passed only after hearing all the affected parties. An order of vacating interim relief passed without hearing the beneficiary of the order is against the basic tenets of justice. Application of mind is an essential part of any decision-making process. Therefore, without application of mind, an order of interim stay cannot be vacated only on the ground of lapse of time when the litigant is not responsible for the delay. An interim order lawfully passed by a Court after hearing all contesting parties is not rendered illegal only due to the long passage of time.

Scope of exercise of powers under Article 142 of the Constitution

19. The directions issued in Asian Resurfacing1 are obviously issued in the exercise of jurisdiction of this Court under Article 142 of the Constitution, which confers jurisdiction on this Court to pass such a decree or make such order necessary for doing complete justice in any case or matter pending before it. In Asian Resurfacing1, the first issue was, whether an order framing of charge in a case under the PC Act was in the nature of an interlocutory order. The second question was of the scope of powers of the High Court to stay proceedings of the trial under the PC Act while entertaining a challenge to an order of framing charge. The question regarding the duration of the interim orders passed by the High Courts in various other proceedings did not specifically arise for consideration in the case of Asian Resurfacing1. The provisions of Article 142 of the Constitution of India are meant to further the cause of justice and to secure complete justice. The directions in the exercise of power under Article 142 cannot be issued to defeat justice. The jurisdiction under Article 142 cannot be invoked to pass blanket orders setting at naught a very large number of interim orders lawfully passed by all the High Courts, and that too, without hearing the contesting parties. The jurisdiction under Article 142 can be invoked only to deal with extraordinary situations for doing complete justice between the parties before the Court.

Court shall not deal with an issue not arising for consideration

25. In the case of Sanjeev Coke Manufacturing Company [(1983) 1 SCC 147] a Constitution Bench of this Court in paragraph 11 held thus:

“11. We have serious reservations on the question whether it is open to a court to answer academic or hypothetical questions on such considerations, particularly so when serious constitutional issues are involved. We (Judges) are not authorised to make disembodied pronouncements on serious and cloudy issues of constitutional policy without battle lines being properly drawn. Judicial pronouncements cannot be immaculate legal conceptions. It is but right that no important point of law should be decided without a proper lis between parties properly ranged on either side and a crossing of the swords. We think it is inexpedient for the Supreme Court to delve into problems which do not arise and express opinion thereon.”
(Emphasis added)

In Asian Resurfacing, there was no lis before this Court arising out of the orders of stay granted in different categories of cases pending before the various High Courts. This Court was dealing with a case under the PC Act. Thus, an attempt was made to delve into an issue which did not arise for consideration.

Conclusions

36. Hence, with greatest respect to the Bench which decided the case, we are unable to concur with the directions issued in paragraphs 36 and 37 of the decision in the case of Asian Resurfacing1. We hold that there cannot be automatic vacation of stay granted by the High Court. We do not approve the direction issued to decide all the cases in which an interim stay has been granted on a day-to-day basis within a time frame. We hold that such blanket directions cannot be issued in the exercise of the jurisdiction under Article 142 of the Constitution of India. We answer both the questions framed in paragraph 5 above in the negative.

37. Subject to what we have held earlier, we summarise our main conclusions as follows:

a. A direction that all the interim orders of stay of proceedings passed by every High Court automatically expire only by reason of lapse of time cannot be issued in the exercise of the jurisdiction of this Court under Article 142 of the Constitution of India;

b. Important parameters for the exercise of the jurisdiction under Article 142 of the Constitution of India which are relevant for deciding the reference are as follows:

(i) The jurisdiction can be exercised to do complete justice between the parties before the Court. It cannot be exercised to nullify the benefits derived by a large number of litigants based on judicial orders validly passed in their favour who are not parties to the proceedings before this Court;

(ii) Article 142 does not empower this Court to ignore the substantive rights of the litigants;

(iii) While exercising the jurisdiction under Article 142 of the Constitution of India, this Court can always issue procedural directions to the Courts for streamlining procedural aspects and ironing out the creases in the procedural laws to ensure expeditious and timely disposal of cases. However, while doing so, this Court cannot affect the substantive rights of those litigants who are not parties to the case before it. The right to be heard before an adverse order is passed is not a matter of procedure but a substantive right; and

(iv) The power of this Court under Article 142 cannot be exercised to defeat the principles of natural justice, which are an integral part of our jurisprudence.

c. Constitutional Courts, in the ordinary course, should refrain from fixing a time-bound schedule for the disposal of cases pending before any other Courts. Constitutional Courts may issue directions for the time-bound disposal of cases only in exceptional circumstances. The issue of prioritising the disposal of cases should be best left to the decision of the concerned Courts where the cases are pending; and

d. While dealing with the prayers for the grant of interim relief, the High Courts should take into consideration the guidelines incorporated in paragraphs 34 and 35 above.

38. We clarify that in the cases in which trials have been concluded as a result of the automatic vacation of stay based only on the decision in the case of Asian Resurfacing1, the orders of automatic vacation of stay shall remain valid.

As per His Lordship Mr. Justice Pankaj Mithal J [Concurring and additional view]

Grant of stay or extension shall be a speaking order

5. It is settled in law that grant of interim stay order ought to be ordinarily by a speaking order and therefore as a necessary corollary, a stay order once granted cannot be vacated otherwise than by a speaking order, more so, when its extension also requires reasons to be recorded.

Parties

HIGH COURT BAR ASSOCIATION ALLAHABAD … APPELLANT(S) VERSUS STATE OF U.P & ORS … RESPONDENT(S) – CRIMINAL APPEAL NO. 3589 OF 2023 – FEBRUARY 29 2024 – 2024 INSC 150 [5 Judge Constitution Bench]

https://main.sci.gov.in/supremecourt/2023/47928/47928_2023_1_1501_51053_Judgement_29-Feb-2024.pdf

High Court of Allahabad vs. State of U.P 47928_2023_1_1501_51053_Judgement_29-Feb-2024